New York (HedgeCo.Net) – Dallas Mavericks owner and billionaire investor Mark Cuban has been accused of insider trading by the SEC after allegedly using private information that helped him avoid over $750,000 in losses tied to stocks.
Search engine company Mamma.com supposedly invited Cuban to participate in its offering, but made Cuban swear he would keep the information private. The lawsuit filed in Dallas claims that Cuban was well aware that his 6 percent stake in the company would be sold below the current market price after learning some inside information. Cuban allegedly took that information and got rid of all of his shares.
"As we allege in the complaint, Mamma.com entrusted Mr. Cuban with nonpublic information after he promised to keep the information confidential. Less than four hours later, Mr. Cuban betrayed that trust by placing an order to sell all of his shares," Deputy Director of the SEC’s Division of Enforcement Scott W. Friestad said. "It is fundamentally unfair for someone to use access to nonpublic information to improperly gain an edge on the market."
In Cuban’s popular blog, blogmaverick.com, the outspoken investor wrote, ““I am disappointed that the Commission chose to bring this case based upon its Enforcement staff’s win-at-any-cost ambitions. The staff’s process was result-oriented, facts be damned. The government’s claims are false and they will be proven to be so.”
Cuban has an estimated net worth of close to $3 billion. In addition to owning the Mavericks, he serves as the Chairman of HDNet, an HDTV cable network.
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